What Is an Options Trader and How to Become One
Table of Contents
What Is an Options Trader?
An options trader buys and sells stock options. You typically work for a large investment bank or private hedge fund, managing complex capital investments for clients. Your duties are to create options contracts and develop forecasting models to determine the optimal price to buy an option to maximize profit and minimize risk. You create reports and models that outline financial positions for your clients that will increase value to their portfolio. Many options traders gain job experience working at an investment bank or large commercial bank and possess qualifications like a bachelor’s degree in economics or math.
How to Become an Options Trader
How Do Options Traders Make Money?
A career as an options trader can be lucrative, but there is also an inherent risk in speculative investing. If an options trader works for a large firm, such as a hedge fund, they are paid a base salary and then earn commissions for profitably buying and selling options. If you decide to become an independent options trader, you make money directly from each successful trade. Options traders working for large firms rely on bonuses. The more successful your skills at trading options, the greater your bonus will be at the end of the year; independent traders must do without this incentive.
